Does a branch office require government approval in India?

Yes, generally requiring approval through the Reserve Bank of India, along with specific restrictions on permitted activities and documentation of the parent company's standing.

Can a branch office simply hire employees in India?

Yes, but it comes with the full registration, liability, and compliance implications of establishing a branch office, which is more than most companies need just to hire a team.

Is a branch office faster to set up than a wholly owned subsidiary?

It can be somewhat faster in some respects, but it still requires meaningful registration time compared to using an Employer of Record, often several months.

What activities typically require a branch office rather than an EOR?

Specific revenue-generating business activities that require a formal registered presence beyond simply employing staff, such as certain direct sales or regulated activities.

Should a company start with a branch office or an EOR when entering India?

For companies focused primarily on hiring, an EOR is typically faster and avoids the liability and compliance overhead of a branch office, making it the more practical starting point.

EOR & Global Expansion

Branch Office

What is a branch office?

A branch office is an extension of a parent company that's formally registered in a foreign country to conduct business activities there, without being incorporated as a fully separate entity like a subsidiary. A branch office typically operates under the same legal identity as its parent, meaning the parent bears direct liability for whatever the branch does, unlike a subsidiary that generally provides a separate legal shield.

This liability structure is one of the key distinctions companies need to understand before choosing this path. A branch office isn't a separate company in the eyes of the law. It's your company, operating under a different registration in a different country.

What setting up a branch office in India actually involves

Registering a branch office in India requires approval processes with the Reserve Bank of India, along with ongoing compliance obligations around reporting and taxation that differ from what a wholly owned subsidiary would face. A branch office generally faces restrictions on the specific activities it can conduct, since Indian regulations distinguish between what a branch office can do versus what would require a fuller subsidiary structure with broader operational freedom.

The approval process itself can take several months, and the specific documentation requirements around demonstrating the parent company's financial standing and the intended business activities add real complexity that a company hoping for a quick India entry often doesn't anticipate going in.

Why a branch office is less commonly the right first move

Given the registration timeline and the specific restrictions attached to branch office activities in India, a lot of companies find this structure doesn't actually fit their initial goal of simply hiring a team there. A branch office still requires meaningful setup time and carries direct liability implications for the parent company, both of which an Employer of Record avoids entirely for companies whose primary goal is building a team rather than establishing a broader business presence.

Companies sometimes gravitate toward a branch office simply because it sounds like a more established, serious way to enter a market, without fully weighing whether the specific activities they plan to conduct actually require that level of formal presence, or whether a lighter EOR arrangement would achieve the same practical outcome faster.

When a branch office genuinely makes sense

A branch office earns its complexity when a company needs to conduct specific business activities in India beyond simply employing staff, activities that require the kind of formal registered presence a branch office provides, such as direct sales operations or activities that Indian regulation specifically requires a registered local presence to conduct. For companies purely focused on hiring, whether building an engineering team or a support function, an EOR typically gets to the same practical outcome faster and without the branch office's compliance overhead and liability exposure.

How kaam.work fits alongside a branch office decision

Companies evaluating whether to establish a branch office in India often use kaam.work first to build and validate their team, then make a more informed decision about whether a branch office or full subsidiary is actually warranted once they understand their real operational needs there. This sequencing, starting with an EOR and evaluating a formal entity structure later, tends to produce better-informed decisions than committing to a branch office based on assumptions made before any actual India operations exist.

Frequently asked questions

Does a branch office require government approval in India?: Yes, generally requiring approval through the Reserve Bank of India, along with specific restrictions on permitted activities and documentation of the parent company's standing.
Can a branch office simply hire employees in India?: Yes, but it comes with the full registration, liability, and compliance implications of establishing a branch office, which is more than most companies need just to hire a team.
Is a branch office faster to set up than a wholly owned subsidiary?: It can be somewhat faster in some respects, but it still requires meaningful registration time compared to using an Employer of Record, often several months.
What activities typically require a branch office rather than an EOR?: Specific revenue-generating business activities that require a formal registered presence beyond simply employing staff, such as certain direct sales or regulated activities.
Should a company start with a branch office or an EOR when entering India?: For companies focused primarily on hiring, an EOR is typically faster and avoids the liability and compliance overhead of a branch office, making it the more practical starting point.